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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Market Tracker who wrote (8688)	5/13/1998 1:10:00 AM
From: BelowTheCrowd	Respond to of 18691

MT, This is especially true given the number of financial services mergers going on. Insurance companies in particular have always been great places to hide all kinds of sleaze. Their balance sheets are horrendously difficult to make sense of, and the real value of long-term assets in the "Schedule D" can be difficult to evaluate or indeterminate. (Remember Integrated Resources????) Banks aren't much better, but at least use accounting methods which are somewhat closer to GAAP than insurance companies. So when I see something like Citicorp/Travelers, I really have to wonder if ANYBODY can see through the smoke that will be generated when they're combined together. How many bad loans will they bury in the insurance company? Interesting that this merger happened just as the Asian Flu could start getting interesting for international bankers. On the flip side, how many underfunded insurance policies might be covered up for by the bank's reserves. And what chance is there that the "independent" auditor will really seek to challenge such an international powerhouse, with whom their company clearly has multiple business relationships? On the basis of sheer obfuscation of the details, Citi/Travelers are on my short watch list. B of A, Nationsbank and many of the others are approaching that status as well. mg